London shares close higher but Lloyds slips

London shares have closed higher, pushed upwards by mining stocks on the back of rising metals prices caused by further evidence of booming demand in China, while Wall Street was buoyed by strong November retail sales data.

The FTSE 100 index closed up 17.2 points at 5261.57 points with Wall Street up more than 40 points when London closed.

Official Chinese data released earlier in the day showed record production of copper, aluminium, zinc and iron ore, showing that demand remains robust. Vedanta Resources closed up 75p at £23.90 with BHP Billiton up 25p at £18.75.

Better than expected US retail sales data for November, meanwhile, gave investors a reason to feel cheerful about the American economy, but also raised the prospect that interest rates will tick higher, which depressed oil prices.

Lloyds Banking Group closed down 2p at 56.22p - the biggest faller in the FTSE 100 - after the closure of its record £13.5bn rights issue in the late morning.

Investors had until 11AM to take up their rights and while an announcement is not expected until first thing Monday morning demand is understood to have been strong with take-up expected to be at least 90%.

Also heading south were shares in the London Stock Exchange, down 19p at 694.5p, as Citigroup slapped a 'sell' on the stock amid continued worries that the problems being experienced by Dubai World could force a sale of the emirate's 21% stake in the bourse.

GlaxoSmithkline continued to climb going into the weekend after Thursday's update from the head of the drug group's emerging markets operation, Abbas Hussain. The update lead to a reiterated buy recommendation from Panmure Gordon - which has a £14.00 target on the stock - in a note:

Challenges are to be expected given the political and financial instability of many of the countries that make up this market segment; e.g. Turkey's healthcare reforms that could result in a near 20% price decrease, but overall we remain confident that these markets will shore up the slowing developed economy markets.

The stock closed up 5p at £13.03.

International Power closed up 7.9p at 295.1p - valuing the firm at £4.5bn - on talk that the the electricity generator is going to receive a bid approach. Speculation has been rife in the market for some time about the company and many traders dismissed the latest rumours as 'idle Friday afternoon chatter'.

WPP closed up 23.5p at 613.5p after HSBC started coverage of the advertising and marketing empire with a 750p target price. Also buoyed by broker recommendations were Thomas Cook, up 8.6p at 227.1p, and Tui Travel, up 8.5p at 259p.

Shares in Informa, the media empire home to Lloyds List and Datamonitor, gained ground after German rival Springer Science and Business Media succumbed to a bid from EQT, the private equity arm of Sweden's Wallenberg family.

Informa, which is due to update investors on its trading next week, had been considering a bid for Springer, which has been up for sale since the start of the year, but walked away last week at least in part because its owners - Candover and Cinven - wanted a deal done rather too quickly for their taste.

Informa's bid would have required the company to raise funds through some form of share sale, which has weighed on sentiment in the stock.

Panmure Gordon analyst Alex DeGroote described the Springer price as "on the low side" but the fact that the deal has been done at all suggests that the appetite for leveraged deals is returning.

That, of course, raises the possibility that Informa itself could be back in the takeover frame.

After a planned £3.4bn merger with UBM went awry in the summer of 2008, Informa found itself in the sights of Providence Equity Partners, Carlyle Group and Blackstone Group. The collapse of Lehman Brothers in September, however, saw the credit markets slam shut and the consortium's plan crumble.

If there is appetite for more risky deals, however, that could see bidders re-emerge for Informa. It is certainly "grossly undervalued" according to DeGroote who has a 400p share price target for the company.

Informa closed up 7.8p at 296.1p.

Shares in JD Wetherspoon closed up 0.9p at 444.9p after a positive note on the pubs group by Greg Feehely and Wayne Brown at Altium Securities.

Recommending that clients buy the stock, they reckon that the near 20% underperformance of the stock in the past three months is a buying opportunity:

Recent share price weakness is unwarranted in our view (the level of underperformance is twice that seen at Mitchells & Butlers for example). The JDW Q1/AGM update on 4 November stated that trading for the 13 weeks ending 25 October saw LFL sales increase by 0.3% against quite a tough comparative period – Q1 2008/09 of +1.5% – although this represented a slowdown from the exit rate from the FY to Jul-09 (+1.2%). Q1 sales last year were boosted by a higher level of marketing expenditure (including the distribution of money-off vouchers to most households in UK) – we retain our +1.5% LFL sales assumption for the full year to July 2010 (we are currently unaware of promotional plans for Jan 2010 onwards).

Hunting closed up 4.2p at 480.6p after positive reaction to Thursday's acquisition by the international energy services company of Welltonic, an Aberdeen-based offshore engineering group for £7m , plus a further £2m based on performance.

"The acquisition complements Hunting's existing well intervention operations and strengthens the global footprint," according to Evolution Securities analyst Keith Morris. In a note to clients he added:

The acquisition is small, and unlikely to make a dent in the cash pile, or move the P&L "needle" significantly in 2010. However, the acquisition price looks very attractive with a trailing EBITDA multiple of 4.5x, and with a normal tax charge a P/E of 10x based at the full £9m acquisition price. We look forward to more deals along these lines.

Summit Corporation plunged 22% - to a mere 6p - after the drugs company announced plans to raise a total of £8.2m in a discounted rights issue and open offer. The cash should keep the biotech firm going for another two years.

Finally, AIM-listed oil services group Hallin Marine Subsea International shot up 102p to 226.5 after American oilfield services company Superior Energy Services made a recommended £96.5m cash bid. The price - at 233p a share - is an 87% premium to the firm's closing price on Thursday.